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Case Study #20: A Business-like Approach to Philanthropy

Wachovia, Citi, and Ryder help VeteransPlus teach family finance

Financial literacy is not the most emotionally evocative subject for philanthropists interested in veterans. Challenges like amputations and unemployment conjure compelling images; financial literacy, by comparison, sounds boring. It is, however, a highly relevant issue for hundreds of thousands of current or former servicemembers and their families. Whether it shows up in household spending, identify theft, security-clearance complications, loan problems, or simply getting over the hump of emergency expenses, financial capacities can make the difference between retaining and losing a job, house, or family. That’s why a group called VeteransPlus, with support from some banks and other donors, has recently begun to provide financial education and counseling specifically designed for veterans, servicemembers, and their families.

“I would see people make poor decisions simply because they didn’t know how to budget, calculate their credit scores, protect their financial privacy. In spite of all the benefits that other nonprofits and the federal government provide, financial literacy seemed to be something that was missing,” recalls John Pickens, executive director of VeteransPlus.

The organization started locally in 2009, delivering basic home-finance workshops to veterans in locations around Florida. Soon, however, the team realized that individuals and families faced a variety of money-management challenges throughout their military careers: enlistment bonuses, combat pay, expenses related to deployment or station transfers, jumps from civilian work to National Guard or Reserve deployment, injury-related changes in earning potential, and delays in government payments could wreak havoc on household budgets.

VeteransPlus developed Ready, Aim, Fire, a program for teaching money management at various stages of deployment. Ready, the pre-deployment curriculum, helps servicemembers get their financial affairs in order prior to deployment; Aim provides support and guidance during deployments, mostly to military spouses facing increased financial responsibilities; and Fire offers help in making wise choices during the transition after deployment. Recognizing the value of the program early on, Wachovia (since acquired by Wells Fargo) funded VeteransPlus to send its counselors on a national tour with the goal of reaching 3,000 individuals in workshops in 22 states.

At the same time, the Defense Department office providing support to National Guard and Reserve members invited VeteransPlus to present at 1,500 financial workshops in a single year. The VeteransPlus counselors thus became involved in several workshops at each city stop. In 2012 alone, the organization served 9,400 clients in these seminars.

While these seminars experienced prolific growth, Pickens explains that “no one is going to raise a hand in a workshop and say, ‘Hey I’m $20,000 in debt and can’t pay my bills, can you talk with me?’” So the group started one-on-one counseling sessions, “so that after we provide the education, they can have somebody to talk to at length, do an assessment, and show them the elements of a budget.” Discovering that clients often resisted face-to-face counseling for the same reasons they would not raise their hands in a workshop, VeteransPlus nimbly shifted to a call-center model. “They’re comfortable calling from home when their kids are in bed and their bills are on the kitchen table,” says Pickens, at which points they can put pen to paper with a counselor by phone and work through assets, income, expenses, and liabilities.

The organization prides itself on providing counselors who are veterans or military family members and have received professional certifications pertinent to their specialties. In 2012, these certified counselors conducted one-on-one counseling with nearly 5,000 vets and servicemembers.

Bringing Order to Emergency Aid

While it was offering clients these tools for sustaining long-term financial health, VeteransPlus also carved a niche in providing emergency aid. Many charities are willing to offer assistance to military families facing an immediate cash crunch, but few use any methodical verification or means test to ensure that the need is legitimate, has not already been met by some other organization, and is complemented with the right type of financial counseling to help individuals and families get back on their feet.

So, VeteransPlus struck up a partnership with several aid organizations in what is called the Yellow Ribbon Registry Network. It operates as both a website for matching applicants with assistance organizations, and an association of assistance organizations dedicated to avoiding misuse of charitable aid. Organizations providing emergency financial assistance through the network refer applicants to VeteransPlus for an in-depth analysis of their applications and financial circumstances, as well as counseling and financial education. The information VeteransPlus collects can then be used by the charities to inform their decisions on assistance.

After several of these organizations had joined Yellow Ribbon Registry Network, the VeteransPlus team noticed “people come in from one partner, and then three months later they would go to another partner.” Whether they were actively gaming the system or just relying on aid without fixing their longer-term problems, this was not healthy behavior. The Registry Network eliminates both risks by imposing some order on the private financial-assistance landscape.

Good information on each applicant is gathered and then shared among all of the charities via a dashboard. “They can see who they’re helping, who our other partners on the network are helping, and they can collaborate with each other.” This helps make sure that the right amount of assistance gets to the right recipients in the right way.

At the same time, the Registry Network makes sure all recipients of emergency aid get counseling on how to keep themselves out of financial crunches in the future. They also get help navigating the short-term aid system. Many assistance organizations have different eligibility requirements, making it tricky to apply. Applicants often had to submit multiple applications to raise their chances of hearing back from one.

The Yellow Ribbon Registry uses a common application for emergency aid, and directs households only to the programs they qualify for. Applicants “can see where their request is in process—who has accepted it, who is considering it,” says Pickens. Since its launch in 2011, the network has helped its partners process more than 6,800 applications for emergency financial assistance, 70 percent of which were granted.

VeteransPlus follows up with aid recipients, offers counseling, and makes sure they haven’t fallen back into old habits.

VeteransPlus is able to follow up with these recipients, offer counseling, and make sure they haven’t fallen back into old habits. As part of its agreement with the PenFed Foundation, for instance, VeteransPlus takes each client through a counseling session before the money is disbursed, and then checks in 45 days later to see what types of financial adjustments and decisions recipients have made. In its work screening applicants to Habitat for Humanity, VeteransPlus offers “rehabilitative” financial counseling to all veterans who do not qualify for a Habitat house. If their VeteransPlus counseling results in a steady record of improved performance, those families can later qualify for the Habitat for Humanity program.

Attracting Business-like Donors

The growth of VeteransPlus has been supported by major donors like Citigroup. Jamie Alderslade of Citi’s community development arm explains that “the delivery of financial coaching and education for veterans is a priority for us.” The bank’s Citi Salutes program is its veterans initiative, combining strands that aim to hire veterans, to provide mortgage and banking services to veterans and servicemembers, and to offer philanthropic help in various forms. Alderslade says the company looks for ways to “support individuals to make positive financial decisions throughout their lives, rather than just at a moment in time.” After finding very few veterans organizations that met that standard, Citi has embraced VeteransPlus, supporting the nonprofit at up to $50,000 annually for several years now.

Another example of a company drawn to VeteransPlus in its corporate giving is Ryder, the large truck-rental and logistics company. As a business oriented toward helping customers make smart decisions about, say, purchasing versus leasing a fleet of vehicles, Ryder is interested in financial efficiency. When it came to their corporate philanthropy they identified VeteransPlus as a kindred spirit.

Ryder particularly values the way the Yellow Ribbon Registry Network has reduced inefficiencies and abuse in the provision of emergency aid to military families. In addition to providing financial support for the project, Ryder donated one of its own IT teams to help VeteransPlus set up the registry’s computer system—to ensure it had adequate data protection measures in place to safeguard its clients’ information, just as Ryder does with the businesses and individuals renting its equipment. “When we heard how difficult it was for philanthropic funding to reach the right veterans in time, it made perfect sense,” says David Bruce of Ryder.

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